GREED, MEET MONEY:

The EU's Fine State Of Affairs (Forbes, 3/23/2004)

A few weeks ago, a man in Finland was fined 170,000 euros, or $208,847, for speeding, which was said to be a record. In Finland, it appears that speeding tickets are assessed according to income and the man in question, heir to his family's sausage business, earned nearly 7 million euros, or $8.6 million, per year.

For the record, the Finnish fine amounted to about a week's pay....

Brussels is not far from Finland, which is where Microsoft ... is reportedly facing a fine from the European Union of 487 million euros or $613 million relating to antitrust violations ...

The amount is far less than the theoretical maximum 10% of the company's annual revenue of $32.2 billion ...

"We believe it's unprecedented and inappropriate for the Commission to impose a fine on a company's U.S. operations when those operations are already regulated by the U.S. government," Horacio Gutierrez, Microsoft's lead lawyer in Europe, told the Associated Press. "The conduct at issue has been permitted by both the U.S. Department of Justice and a U.S. court."...

One would think that fine levelers would seek to pay attention to the seriousness of the offense as well as the ability to pay. No one suggests that Microsoft earned more than a pittance of its overall profit--in Europe or anywhere else--from either servers or its Media Player software. But Mario Monti, antitrust chief of the European Union, thinks the issue goes beyond the specific violations ...

So, where does the EU get $613 million? Perhaps from Finland. The fine, as it happens, works out to about one week's worth of Microsoft's annual worldwide revenue.

The common link between European support for Saddam (and his oil-for-palaces-and-bribes program) and its massive fines for trivial Microsoft offenses is Europe's grasping spirit. It's becoming difficult to do business abroad without diplomatic protection, backed by a credible military threat. The Wall Street Journal today had an article about how Wal-mart has found it impossible to operate abroad without support from the U.S. government, and thus has built up a Washington lobbying organization. It appears, however, that the Bush administration has not made any credible threats of a European invasion, and so the EU is less accommodating toward us than Lybia or Pakistan.

Sometimes on the Brothers Judd we argue that the Judeo-Christian ethic of kindness and love is better for the economy than the sheer self-interest, however enlightened, of homo economicus. Europe's ongoing decline will continue to provide support for that thesis.

Posted by Paul Jaminet at March 24, 2004 11:08 PM